London boroughs voice concern over new permitted use class for short term lets

Government plans to automatically reclassify existing short-term lets into a new planning category under permitted development undermines efforts to preserve homes for residents, councils in London have warned.

In a letter to the Housing Secretary Michael Gove sent before the announcement of the general election, the cross-party group London Councils questioned the government’s proposal to create a new planning use class –  the ‘C5’ use class – for properties already used as short-term lets.

Under the plans, property owners would be able to change the use class of their property from a C3 dwellinghouse to a C5 short term let and vice versa, without planning permission.

Gove told Parliament in February 2024 that the Government will introduce the new planning use class, following consideration of a consultation on the proposals launched in April 2023.

He said further details – including the timeline for implementation – will be set out when the Government formally responds to the respective consultations, he added.

Alongside the use class proposal, the Government said it will introduce a mandatory register of short term lets to track the number of such properties.

It also said in areas where there are a high number of short term lets, the permitted development right may be removed via an article 4 direction.

However, London Councils warned the change "will mean the overnight loss of thousands of homes from London’s permanent housing stock".

This will lead to less housing for residents and higher prices in London’s private rental sector, which has undergone significant turbulence in recent years, the group argued.

It also highlighted estimates that 11% of short term lets in the capital appeared exceed the 90-day limit on how often a property can be rented out as a STL before planning permission is required - noting that the figure "is likely to be significantly higher".

Cllr Darren Rodwell, London Councils’ Executive Member for Regeneration, Housing & Planning, said: “For too many years the short-term lets market has been growing out of control.

“With housing and homelessness pressures in the capital worse than ever, boroughs are extremely concerned about losing permanent housing stock. The priority has to be ensuring homes are available for long-term residents.

“We welcome the government’s move to improve regulation of the sector, but the blanket reclassification of existing short-term lets into a new use class could strip the capital of thousands of homes."

Adam Carey